A highly successful ex-Lehman Brothers trader apparently secretly recorded a number of conversations he says prove Lehman owes him more than $83 million in bonuses for work done in 2008, although he received a similar amount when Barclays acquired Lehman a few months later.
Testimony from ex Lehman trader
On the second day of a trial over whether Lehman owes its ex-employees bonus money, ex- Lehman global rates trader Jonathan Hoffman testified he frequently taped conversations with colleagues without telling parties he was recording them. Hoffman claims it was his method of taking notes.
Back in 2008, in a negotiation with Rich Ricci, the chief of Barclays’s IB at the time, Hoffman told Ricci, “I guess I’m surprised that my contract isn’t just being made whole.”
Legal analysts say the main question in the trial main is whether Barclays paid Hoffman the $83 million bonus as part of his Lehman contract or as part of a new arrangement. Attorneys for the trustee winding down Lehman argued that Lehman doesn’t owe Hoffman anything since the trader’s contract with acquirer Barclays was basically the same as his Lehman contract and Barclays already paid him the bonuses.
Details on the case
Of note, Hoffman’s trading resulted in almost $550 million in profits for Lehman in 2008, and his trading represented a solid 10% of the bank’s profits in 2007. Obviously, this meant Barclays wasn’t his only employment option.
In earlier testimony, his lawyer asked about a meeting Hoffman had with billionaire Kenneth Griffin’s Citadel LLC, a major hedge fund based in the Windy City.
“Were you confident you could get an offer from Citadel,” his attorney asked. “I’m still confident I could get an offer from Citadel,” Hoffman answered.
The judge also asked Hoffman, who further noted he had a five-hour meeting with Steven Cohen at SAC Capital Advisors, if the Barclays deal was the best deal on the table.
“I don’t think I took the best deal,” Hoffman replied, but he did note he did not actually receive any other formal job offers. Hoffman worked at Barclays for close to five years, earning more than $1.25 billion in profits. He testified that he is currently not employed.